April brings wage and rates increases

Restaurants have taken on more cost increases this month, as April 2024 sees jumps in mandatory wages and business rates.

According to trade body UKHospitality, increases to the National Minimum Wage and National Living Wage will see the sector’s wage bill increase by £3.2bn. Increases to business rates add up to £224m. 

After a collective failure to act in Budgets in Westminster, Edinburgh and Cardiff, UKHospitality is calling on all governments to rebalance the costs that hospitality businesses pay and reduce their cost burden so they can make the investments needed to grow and create communities in which people want to live, work and invest.

"Every day, hospitality is serving Britain," says Kate Nicholls, chief executive of UKHospitality. "It’s serving the nation with good food, drink and experiences, as well as contributing £140bn in revenue, £54bn in tax receipts and providing three and a half million people with jobs.

"All of those benefits to Britain, our lives and communities are put at risk by the £3.4bn Budget hangover hitting the sector today.

"Businesses can’t find £3.4 billion easily – that’s the cost of a billion cups of coffee. The money that they want to put towards investment in growth will have to be spent keeping their doors open. Our sector firmly believes in paying people a good wage that reflects their value and importance to what we do. But we need healthy and profitable businesses to do that, supported by regulation that doesn’t penalise a community-based sector. 

"Governments across Britain have levers they can pull to help businesses keep serving Britain. They can, and should, fix business rates, ease employment costs and reduce VAT. I would urge them to pull these levers quickly."

UKHospitality's three quick levers the government can pull

• Fix business rates – replace short-term solutions with a permanently reduced business rates multiplier for hospitality, leisure and high-street retail sectors at a rate of 30 pence in the pound. 
• Employment costs – support businesses to introduce a record increase in the National Living Wage by temporarily reducing the rate of employer National Insurance Contributions. 
• VAT – reduce the rate of VAT on hospitality, leisure and tourism to 12.5%, returning to the effective policy during the pandemic and matching the average of our continental competitors.  

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